Stephen Houghton

SIGOMA responds to the Spending Review

Posted on November 27, 2020

While there are some individual elements to be welcomed, taken as a whole, the spending review is a missed opportunity for levelling up says Cllr Sir Stephen Houghton, Leader of Barnsley Council and chair of the Special Interest Group of Municipal Authorities (SIGOMA).

It is now a universally accepted fact that all areas outside of London and South East have long been starved of investment. The Treasury’s Green Book skews investment to already successful places with high house prices ahead of places like Barnsley. Many have called for its reform, so it is welcome that the Chancellor has made this happen. The formula should take account of the transformative regenerative impact of any investment and the levelling up impact it could have.

In addition to general capital investment, the government will have two pots of money to further support “levelling up”. Both are vitally needed. The first is the UK Shared Prosperity Fund, the successor to EU structural funds. This funding went disproportionately to more deprived areas so it is welcome that the government have committed to supporting the places most in need. I am particularly pleased that there is a written commitment to support ex-industrial areas which make up much of my own borough of Barnsley and the wider so called “red wall” areas. However, frankly it is disappointing that we have had to wait up until now for further information given current funding arrangements end in just over a month. Reading the fine print, it appears that the full details will not be announced until the Spring, another damaging delay. Moreover the amount on offer is less than the amount we would have received had we remained in the EU given the economic downturn in places like South Yorkshire. The big advantage of EU funds was also local discretion - will that remain?

The second pot is £4bn directly for “levelling up” announced at the spending review. It is very welcome that government will confront the problem of levelling up with a specific fund, but it looks like a beauty contest style bidding process for Northern towns on how it will be allocated from Whitehall. The Director of the Northern Powerhouse Partnerships Henri Murison described it as a “hollow victory” as Whitehall will still have final say over what happens. It appears government hasn’t learnt that not everything can be decided by bureaucrats in London – central to true “levelling up” is empowering local people with more say over their area. This crisis has shown the fallacy of central control – local knows best. Indeed the govts towns fund for places left behind saw money go to Bournemouth not Barnsley and Newark not Knowsley. Central control can also mean party political objectives overriding community needs. Let’s hope for more transparency and objectivity this time round.

Nonetheless the ambition of the levelling up agenda has to be welcomed. However, what I have long said is that while capital investment is important, core services delivered by the public sector including local government are crucial for local prosperity and “levelling up”. The quality of education, local social care for adults and children and housing provision are so important to get right. There can be no levelling up in the north without improvements to the funding of our services. That is why the decade of cuts to the public sector since 2010 have been so damaging to our local areas. While the whole country experienced austerity, my network of urban councils saw an additional £21 million cut each. The north hasn’t just been left behind economically it’s been left behind in the funding of its public services. The proposal to fund Adult Social Care from local council tax means wealthier areas with high council tax bases will generate more income than poorer communities where council tax generates much less. The result can only be a postcode lottery on how we look after an aging population. That cannot be right and it is the opposite of levelling up.

Once you factor in the massive costs of dealing with Covid – such as buying PPE, protecting Social Care, welfare support and support for the homeless, councils are facing a hefty funding gap. The Chancellor announced that the total amount of resources available to local government next year will increase, which is good news. However, if you read the fine print you can see that the majority of this increase will come from further council tax increases. More pressure on those who can least afford it.

Yet the biggest disappointment about the review is not the cash being spent it’s the move away from devolution. For years the government has said local knows best and pushed us into Devolution deals at times against our better judgement. The review has largely ignored the knowledge and infrastructure that’s now in place. Central political control has trumped (forgive the phrase) common sense. Instead of getting on with the recovery we look like being bogged down in bureaucracy when our places least need it. Its not too late to rethink this. We want to help the govt get us out of the crisis. Please let us do so.

This article first appeared in the Yorkshire Post. You can read it here: